Source · Select Committees · Environmental Audit Committee
Recommendation 29
29
Deferred
Paragraph: 108
Provide financial incentives to establish essential electricity infrastructure supply chain elements in the UK.
Recommendation
We recommend that the Government work with industry to provide incentives, including financial support, to ensure that essential elements of the electricity infrastructure supply chain are based in the UK, so as to counter competitive incentives from other countries racing to develop their domestic electricity grids. Government policy in this area should prioritise the maintenance and development of the clean UK steel industry as well as driving the UK technology sector.
Government response summary AI-generated
The government states that clean energy industries are a priority growth sector and that it will set out its full approach to supporting UK supply chains in the forthcoming Industrial Strategy, without committing to immediate financial incentives for basing essential supply chain elements in the UK.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
108
Government Response
Deferred
HM Government · verbatim extract
Deferred
The Government agrees that additional incentives will be key to ensuring the growth of a more resilient supply chain for manufacturing electricity networks critical components. The Government will continue to review options including financial support. For example, the Contracts for Difference (CfD) Clean Industry Bonus (CIB) launched on 12 November will provide a bonus on CfD payments to fixed and floating offshore wind developers who choose to invest in cleaner manufacturing facilities, or invest in manufacturing assets in the UK’s poorest communities. This includes the electricity networks infrastructure these developers will procure for connection to the onshore grid. As outlined in the response to Recommendation 12, the full approach to supporting supply chains will be outlined in the Industrial Strategy. We recognise that there is no single solution to overcome the complexities of establishing an effective supply chain for the electricity network, and that funding support will not be a “silver bullet”. Instead, further funding interventions may form part of a wider financial package from government 12 https://www.ofgem.gov.uk/decision/riio-3-sector-specific-methodology-decision-gas- distribution-gas-transmission-and-electricity-transmission-sectors including making use of freeports, and other support and tools from initiatives such as the National Wealth Fund (formerly the UK Infrastructure Bank (UKIB)). The wider financial landscape is currently developing at pace, and we hope to update on how these wider incentives will function shortly. In addition, the other actions outlined in response to
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